Despite what you might have heard, offsetting remains an important tool for big companies tackling their carbon footprints

Voluntary carbon offsetting has been subject to criticism, and some have said that carbon offsetting has had its day. In fact, far from being a passing fad, carbon offsetting in the FTSE 100 is still alive and kicking – and in fact has never left the agenda.  

Between 2005 and 2010, six FTSE 100 companies declared carbon neutrality, at a steady rate of almost one per year. Fifteen other FTSE 100 companies also use carbon offsetting for a portion of their emissions or for customer and staff schemes.

So who is doing it? The financial sector is leading the way. Of the 21 FTSE 100 companies that are offsetting, 14 are in the financial sector. 

Other sectors offsetting include consumer staples (manufacturers such as Unilever, Reckitt Benckiser, Imperial Tobacco) and consumer discretionary (media and entertainment companies such as BSkyB, Pearson, TUI Travel and WPP).

Low-intensity leaders

What the vast majority of these companies have in common is their low carbon intensity.  Ninety percent of companies that use carbon offsetting are non-carbon intensive, that is, have low carbon emissions per unit of revenue.

Just two medium intensity companies are bucking the trend and using carbon offsets. The Unilever brand Ben and Jerry’s, has been carbon neutral since 2007 and Reckitt Benckiser has offset its manufacturing operations since 2006.

At Carbon Retirement, we think that use of offsetting only by low polluters is down to two factors. One, that offsetting or going carbon neutral is relatively low cost for these companies. Two, that non-carbon intensive companies are less likely to be covered by regulation, and are therefore more willing to self-regulate.


We calculated that the fact that offsetting is almost exclusively used by low polluters means that only 0.1% of the 2.8 billion tonnes of the total global carbon emissions (including non-UK operations) from the FTSE 100 is being offset.

So, what can the FTSE 100, or any large companies for that matter, do with carbon offsetting to make a difference?

The bigger emitters  

For a start, other non-carbon intensive sectors need to take up the mantle the financial sector has laid down. Of FTSE 100 financial sector firms, 61% use carbon offsetting, and are also making decent emissions reductions in their own operations as well. 

There are 48 non-carbon intensive companies in the FTSE 100 that are not using carbon offsetting. If all non-carbon intensive companies went carbon neutral, emissions would reduce by 39m tonnes per year – that’s 7% of the UK’s carbon emissions.

That would almost double the size of the voluntary offsetting market, meaning that UK listed companies could have a large influence over the quality of offsets generated.

Not only that, but with an increased volume of carbon offsetting by well-known brands, the public would become much more savvy about carbon offsetting claims and would learn to demand more details, such as the quality of offsets purchased.

Medium carbon intensity businesses also have the opportunity to make a difference. Following the lead of Unilever and Reckitt Benckiser, they could look more substantially at their supply chain and consumer use of products and see what part reduction and offsetting could play.

Jane Burston is founder of Carbon Retirement. Carbon Retirement has just published a new report on carbon offsetting in the FTSE 100.



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